Vedder Price is pleased to announce that its client Byline Bancorp, Inc. (Byline), parent company of Byline Bank, entered into a definitive agreement to acquire First Evanston Bancorp, Inc. (First Evanston), parent company of First Bank & Trust, in a cash and stock transaction valued at approximately $169 million.

At the closing of the transaction each share of First Evanston’s common stock will be converted into the right to receive 3.994 shares of Byline common stock and an amount in cash equal to $27 million divided by the number of outstanding shares of First Evanston common stock at the closing date. Based upon the closing price of Byline’s common stock of $19.73 on November 24, 2017, this represented a fully diluted transaction value of approximately $169 million. The transaction is expected to close during the first half of 2018. Closing of the transaction is subject to regulatory approvals, the approval of First Evanston’s and Byline’s shareholders, and the satisfaction of certain other closing conditions. Continue Reading Vedder Price Counsels Byline Bancorp, Inc. in Its Acquisition of First Evanston Bancorp, Inc.

On October 27, 2017, the Office of the Comptroller of the Currency (OCC) issued a full-service national bank charter since the financial crisis to Winter Park National Bank. Winter Park National Bank is the first de novo national bank and first de novo approved for federal deposit insurance in Florida since the financial crisis.

Provided below are some takeaways from Winter Park National Bank’s application and approval.

On October 12, 2017, the OCC issued OCC Bulletin 2017-40 announcing the release of its Policies and Procedures Manual 5000-43 (PPM 5000-43), which outlines the OCC’s policy and framework for how the agency determines Community Reinvestment Act (CRA) ratings when there’s evidence of discriminatory or other illegal credit practices directly related to a bank’s CRA lending activities.

Here are our observations and takeaways on the PPM 5000-43:

PPM 5000-43 provides that the OCC “only considers lowering the composite or component performance test rating of a bank if the evidence of discriminatory or other illegal credit practices directly relates to the institution’s CRA lending activities.”

Any OCC determination to lower an institution’s CRA composite or component rating will be guided by two principles: (1) there must be a “logical nexus” between the assigned ratings and evidence of discriminatory or other illegal credit practices in the bank’s CRA lending activities to ensure alignment between the ratings and the bank’s actual CRA performance; and (2) full consideration is given to the remedial actions taken by the bank.

Prior to the lowering of a bank’s CRA composite or component rating, OCC examiners must provide “strong evidence of quantitatively and qualitatively material instances of discriminatory or illegal credit practices directly related to CRA lending activities that have resulted in material harm to customers.”

The OCC will assign CRA ratings in light of the bank’s entire record of performance, “including the cumulative impact of supervisory or enforcement actions taken against a bank,” and CRA ratings generally will not be lowered solely based on the existence of evidence of discriminatory or other illegal credit practices prior to commencement of the CRA evaluation if the bank has remediated or taken appropriate corrective actions to address them.

In our view, this would indicate that the OCC will not take into account, for purposes of evaluating a bank’s CRA compliance, any alleged unfair or deceptive practices that are not directly related to a bank’s lending activities.

On October 5, 2017, the Consumer Financial Protection Bureau (“CFPB”) released its nearly 1,700-page final rule for short-term loans (“Payday Lending Rule”). Notably, almost simultaneously with the CFPB’s announced Payday Lending Rule, the Office of the Comptroller of the Currency (“OCC”) rescinded its longstanding Guidance on Supervisory Concerns and Expectations Regarding Deposit Advance Products (“DAP Guidance”), theoretically opening the door for banks to offer short-term credit products to customers with less regulatory burden.

When will the Payday Lending Rule become effective?

While certain provisions of the Payday Lending Rule relating to the registration of information systems will become effective 60 days after the Payday Lending Rule is published in the Federal Register, the rest of the Payday Lending Rule will become effective 21 months after publication in the Federal Register. Consequently, the Payday Lending Rule will not become effective until sometime during the summer of 2019. Given that the term of the current CFPB Director expires in mid-2018, and will presumably be replaced by a director less hostile to the payday loan industry, some industry commentators speculate that the Payday Lending Rule, at least in its present form, may never become effective. Continue Reading The CFPB’s Payday Lending Rule: An Opportunity in Disguise?